It has been customary and standard practice for the party initiating long distance telephone calls to pay the charges for the call. There are exceptions, however, such as collect telephone calls and IN-WATS on the public telephone network. One reason for the caller to pay for the call is that the caller usually has the greater incentive for placing the call and that the caller controls when the call is made.
The cost of calling may also be borne at the caller's end because originating and routing a call requires more hardware and software equipment than is required at the terminating or receiving end. Another reason that the caller or originator pays is the desirability to maintain a standard procedure and a consistent policy.
In the telecommunications field, regardless of who pays for the communication, the charges for the call are generally based on which end originates the call, i.e. "A calling B collect" is charged to B on the basis of A's tariffs and A's time of day. The cost of a telephone call varies depending on the call originator's time zone and time-of-day.
The reason or incentive to have calls placed, processed, or originated in the reverse direction, i.e. from a called party's end rather than from the calling party's end, is to obtain a lower rate. Discount rates are generally available when telephone plant is most idle as during daytime off business hours and at night. Telephone companies reduce their rates during these periods in order to increase customer's incentive to place calls and to increase utilization of their investment by increasing the number of calls during these hours. This utilizes equipment that would otherwise be idle.